Sigma Lithium (TSX-V:SGML) is denying reports that a Brazilian court has ordered it to suspend the environmental licences for its Grota do Cirilo lithium complex in Minas Gerais.
Media outlets including Reuters reported that a local court had ordered a halt to mining activities at the project. This news followed allegations that Sigma understated the operation’s proximity to the traditional territory of Afro-Brazilian Quilombola communities.
However, in a statement on Sunday evening, the Canadian lithium miner said it had not received formal notification of the reported decision.
“Sigma Lithium has not received any legal communication in connection with a preliminary judicial ruling issued without due process, allegedly suspending the company’s environmental licences,” the company said.
Grota do Cirilo, located in a region known as Brazil’s Lithium Valley, hosts one of the world’s largest hard-rock lithium deposits and includes an adjacent processing plant.
The mine is Sigma’s only producing asset and has a nameplate capacity of 330,000 tonnes of lithium oxide concentrate annually.
Court ruling disputed
According to earlier reports, a local court issued an emergency injunction after finding that the mining operation falls within the community’s direct area of influence and therefore requires environmental impact studies specifically addressing Quilombola communities.
The civil action was brought by the Federation of Quilombola Communities of Minas Gerais.
Sigma had previously argued that the development sits outside the presumed 8km impact zone, according to the court decision cited by Reuters.
However, based on evidence presented to the court, the judge found that the proximity of ongoing mining activities posed potential risks to the traditional territory.
“The risk of damage stems from the fact that the mining complex operates continuously, extracting resources, and carrying out constant blasting and earthmoving just a few kilometers away from the traditional territory,” the ruling said.
The judge also reportedly ordered environmental agencies in Minas Gerais to refrain from issuing new environmental permits to Sigma.
Sigma described the reported ruling as “unwarranted and in dissonance with Brazil’s strong rule of law”, arguing that due process had not been followed.
The company said it had taken appropriate measures during a three-day national holiday while the judiciary was in recess and would begin its legal defence when courts resume regular operations on 8 September.
Second dispute in months
The latest court dispute adds another layer of uncertainty to Grota do Cirilo after operations were temporarily suspended earlier this year.
Sigma halted operations in July after the local environmental authority imposed an embargo on the project, which spans the municipalities of Araçuaí and Itinga.
The embargo followed a late-May inspection that identified alleged violations. Sigma denied wrongdoing and resumed industrial and mining operations in August after reaching a settlement with the state of Minas Gerais.
Sigma says it remains focused on scaling up its operations and expects to deliver 240,000 tonnes of lithium oxide concentrate within 12 months, as part of its agreement with Minas Gerais authorities.
The latest developments come as lithium prices recover from a prolonged downturn and supply disruptions take on greater significance amid rising demand from electric vehicles and battery energy storage systems.
Write to Jackson Chen at Mining.com.au
Image: Sigma Lithium
